The hydrophobic effect is the source of one of the most important of the forces governing the protein folding and intermolecular interaction in the biological systems. The effect is poorly understood at the molecular level and it has been considered dangerous by some to use the data gathered from the small molecule systems in applications involving vastly more complex biological systems. The factor that hinders understanding has always been the slippery behavior of the water molecules in their liquid state. I have studied this behavior using statistical mechanical techniques and a combination of data from the traditional thermodynamics experiments and new molecular simulation studies. This study yields a deeper insight into the essence of hydrophobic phenomenon and will form the basis of further studies of the extrapolation of data from small to large systems.